Self-employed persons

If you are self-employed with YEL or MYEL insurance, i.e. you have statutory pension insurance for entrepreneurs (YEL) or for farmers (MYEL), your parental allowance will be determined according to the earnings stated in your insurance policy. The basis for allowance starting in 2013 is YEL or MYEL earnings for 2011, adjusted with the wage coefficient.

The pension institute confirms the annual earnings for a self-employed person. Therefore, the earnings of the insurance policy are not your own wages or earnings from business activities. In other words, the wages you pay yourself from your business have no impact on the amount of your parental allowance when the allowance is paid on the basis of YEL or MYEL insurance. Further information is available on the website of the Federation of Finnish Enterprises.

If you are so-called part-time entrepreneur, i.e. you have part-time entrepreneurial activities while you are in paid employment working for another employer, your income from work and the earnings according to the insurance are taken into account in the calculation of the allowance.

If you are not obliged to take out a YEL or MYEL insurance, your allowance is paid according to the income you have declared to the tax authority (e.g. on the basis of earned income and wages). Earned income is increased with the wage coefficient of one year. If you have no earned income or wage-related income, you will receive the minimum amount of parental allowance.

Allowances are also subject to increases. The increases only apply to those whose parental allowance is paid on the basis of earned income.

Increases to allowances

Allowances are also subject to increases. The increases only apply to those whose parental allowance is paid on the basis of YEL and MYEL income.

• Maternity allowance is paid at an increased rate for the first 56 working days (maximum 90% of wages).
• Parental allowance is paid at an increased rate for the first 30 working days (maximum 75% of the wages). The increased rate can be paid to both the father and the mother if both parents are on parental leave.
• If the father has not taken parental leave for 30 days before his daddy month, he may receive the parental allowance and the paternity allowance at an increased rate for the daddy month for a total of 30 working days.

Examples of the amount of parental allowance 

 If earnings have increased by at least 20%

You can also request Kela to calculate the allowance on the basis of YEL or MYEL income for the 6 months proceeding the allowance period if the earned income converted to annual income is 20% higher than the earned income verified in taxation. Kela will then calculate the earned income for the 6 months immediately before the start of the parental allowance period and multiply it by two to obtain annual income.

If you have compulsory or voluntary YEL or MYEL insurance, Kela will calculate your allowance from the earned income according to your YEL or MYEL insurance. In such a case, you will not be able to choose whether to present as your 6-month income the earned income from your pension insurance or the earned income and wages you have obtained from your own business activities, but only the YEL or MYEL income will be used as income as a basis for the allowance.

An insured entrepreneur need not present an account of the YEL or MYEL income to Kela because Kela will receive information on entrepreneurs' YEL or MYEL income directly from pension institutes.

If you are not obliged to take out YEL or MYEL insurance, the earned income from your own entrepreneurial activities will be regarded as your earned income (i.e. the wages and the share of income earned from the business activities). However, in case of an entrepreneur working in a limited liability company, only wages are regarded as earned income and not, for example, dividend income.

Updated 12/19/12

• Tweet
• Print